Manufacturers are Complaining Loudly About Inflation

It’s undeniable that inflation is taking its toll on the American economy. 

In Middle America, inflation has become quite noticeable. New data from the Federal Reserve Bank of Kansas City showed that manufacturing activity has scaled down in May compared with April.  

Revelations from May 26, 2022 showed that the Tenth District manufacturing survey’s composite index dropped from 25 in April to 23 in May. 

As John Carney of Breitbart News noted, “The results fell short of expectations.”

Initially economists who were surveyed by Econoday, projected the index would go back up to 32. In February, that index was at 37. 

The regional Fed banks in New York, Philadelphia, and Richmond reported similar drops in their composite indices. The Philly Fed index dropped from 17.6 to 2.6 over the past month. 

Similarly, the gauge of production continued dropping. In May, it fell down to 19 from 28 in April. In March, the gauge of production was at 46. 

In addition, shipments dropped for two straight months. 

Inventories of finished goods and raw materials fell sharply for a second consecutive month.

48% of manufacturers indicated that the prices received for their products grew compared with April. 

Only 4% of manufacturers have reported to have lowered their prices. 91% of manufacturers have reported charging higher prices than in 2021.

77% indicated that they paid higher prices for raw materials. Only 6% said they paid less 

92% of manufacturers reported that their businesses had been greatly impacted by spikes in material prices, shortages, and longer delivery times. 

The rest of this report can be read here. 

It’s abundantly clear that there’s an inflationary crisis taking place in America. Even the chattering classes are admitting that inflation is in the air.

However, their explanations miss the mark. They’re either blaming Vladimir Putin’s invasion of Ukraine and/or business greed for America’s current economic problems. 

As seasoned observers of economics know all too well, all of the current economic problems America faces are the product of government intervention — from excessive regulation of the economy to the easy money policies the Fed promotes.

Those factors are at the root of all of America’s economic woes. That said, DC refuses to acknowledge that and instead opts for other convenient scapegoats. At the end of the day, these people want more control over the economy and people’s private affairs.

If America wants to get out of this economic pickle, it needs to embrace less government and allow for free markets to flourish.